Transnet executives earn
multi-millionaire salaries.
The bulk of those of you
who are reading this article
have salaries that would
utterly pale in comparison
to the following earnings
by senior executives at
Transnet and its subsidiary
freight companies, extracted
from the Parastatal
Remuneration graphic
published in a recent
Business Times.
And it’s pretty well
odds on that you didn’t get
an annual increase that
matches any of those listed
either.
The rich list showed that
Siyabonga Gama, CE of
Transnet Freight Rail (TFR),
earned R8 745 000 as a
salary in 2011, with
a bonus of R2 510 000,
which totals at R11 255 000
for the year. His annual
increase? A whopping
211.31% up on 2010.
Karl Socikwa, CEO of
Transnet Port Terminals
(TPT), received R2 884 000
as a salary, and R6 107 000
as a bonus – totalling
R8 991 000. A more modest
annual increase of 42.46%.
Tau Morwe, CE of
Transnet National Ports
Authority (TNPA), received
a salary of R3 185 000,
a bonus of R5 388 000
– totalling R8 573 000.
Annual increase, 18.86%.
Some other total
incomes were: Richard
Vallihu, CE of Transnet
Rail Engineering (TRE),
R9.238-m (+21.92%);
Khomotso C. Phihlela,
group executive of
commercial at Transnet,
R8.423-m (+18.5%); and
Anoj Singh, chief financial
officer of Transnet,
R8.191-m (+71.54%).
FTW worked out
comparative figures for
two chief executives in the
private sector – and found
that here the bonuses were
very strictly related to that
word “performance”. If
that’s the case, does the
TFR CEO deserve a bonus,
was the question asked by
several industry sources
contacted by FTW.
They also strongly
suggested that Socikwa
and Morwe were also
not really “performing”
although TPT and TNPA
are big profit-generating
operations. But, they
stressed, this was largely
because any cost increases
are more than covered by
an annual upward revision
of their tariff levels – only
restrained in recent years by
the control imposed by the
SA Ports Regulator.
Our contacts point out
that the operations display
no annual increases in
productivity or general
efficiency, which continue
to remain at a low level.
But it’s a different matter
in the private sector.
Said one of the company’s
annual reports: “The
committee reviews bonuses
annually and determines
the level of the bonus based
on performance criteria
set at the start of the
performance period. The
criteria differ depending
on the position of each
executive and the division
in which they operate and
include headline earnings
per share and divisional
operating profit growth
targets; return on invested
capital targets; black
economic empowerment and
discretionary elements.
This led to the following
salary plus bonus figures for
our two selected CEs.
One received a salary of
R4 901 000, and a bonus of
R3 950 000, giving a total
of R9 281 000.
In the second case, the
exec received a salary of
R4 618 000 and bonus of
R4 391 000 – totalling
R9 009 000.
But they both also got
another benefit not granted
to the Transnet CEs – a
share rights issue each year.
But again, this was not a
free perk. It was again very
strictly determined by the
executives’ performance.
Said the annual report:
“Vesting of share rights
is subject to performance
conditions being met. The
performance conditions
and performance period are
determined by the board on
an annual basis in respect of
each new grant of rights.”
And this share rights
issue brought the executives’
annual remuneration above
par with those of Transnet.
In the case of the first
executive, his share
rights were vested at the
equivalent of R2 916 000,
added to the previous total
of R9 281 000 – bringing
his total annual income up
to R12 197 000.
In the case of the
second the formula read:
R10 176 000 + R1 251 000 =
R11 427 000.
But it’s at lower level
employees that the public
sector is vastly overpaid.
One in eight South
Africans works for the
public sector and earns on
average 44% more than
employees in the private
sector, according to a recent
survey released by the SA
Institute of Race Relations
(SAIRR).
According to the survey,
13% of South Africa’s
workforce is employed
in the public sector. This
equates to 1.61 million out
of the total 12.8m people
employed nationally.
“In 2000, average public
sector earnings were 12%
higher than those in the
private sector. In 2010, they
were 44% higher,” said
researcher Lucy Holborn.
INSERT
‘One in eight South
Africans works for
the public sector and
earns on average 44%
more than employees
in the private sector.’
